14 Oct 2022 -

Conflict is ‘reshaping tech supply chains’

chinese city

The intensified US-China tension over technology — and especially semiconductors — has shifted electronics supply chains in slow but significant ways, begins the FT.

“TSMC, Taiwan’s most valuable company and the world’s biggest producer of processor chips, will soon open a new facility in Arizona. Previously, almost all of TSMC’s recent investment was in Taiwan or China. Now it is diversifying its fabrication footprint, building a new chip fab in Japan and exploring one in Singapore, too. TSMC’s change in tack is driven by subsidies from these governments as well as political pressure to reduce the concentration of chipmaking along the Taiwan Strait.

“Attention has focused on recently passed US legislation to incentivise semiconductor manufacturing, leading TSMC and South Korea’s Samsung to build new facilities in Arizona and Texas respectively. Europe, Japan and India are rolling out their own semiconductor subsidies, too. As the location of semiconductor fabrication shifts, the production of chipmaking materials and supplies will, too.”

“The biggest semiconductor subsidy programme, however, is China’s, where the national government, as well as provincial and local authorities, continue to pour funds into the chip industry. A wave of new facilities producing low-end processor chips is about to come online, which will depress prices in this segment and spark dumping allegations and trade disputes.

“More immediately, China’s government subsidies for Yangtze Memory Technologies Corporation, a producer of Nand memory chips, appear to be bearing fruit. Apple is considering using YMTC’s chips in new iPhones. Previously this type of chips was purchased from South Korean, Japanese or American companies.”

Read the full article here

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